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Page added on January 9, 2018

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Europe Becomes Victim Of Russia’s Newest Oil Strategy

Consumption

Higher shipments of Russian crude oil to China may saddle European importers with a fatter bill, an industry consultancy warned at the end of last year, noting the latest stage of Russia’s Eastern pivot: the launch of the expanded East Siberia-Pacific Ocean pipeline that would lift Urals crude supply to China twofold, to 30 million tons annually. 

 

https://www.zerohedge.com/sites/default/files/inline-images/20180107_russ.png

FGE said in a note quoted by Bloomberg that Russia will start moving more Urals eastward right after the launch of the pipeline extension, at a rate of 160,000 bpd. The overall increase of Russian crude shipments to China, according to the consultancy, could be around 200,000 bpd.

This means less oil for Europe, which is Russia’s number-one oil client. This only highlights the significance of Moscow’s Asian pivot amid lingering European sanctions following the 2014 annexation of Crimea and Russia’s involvement in separatist conflicts in the Ukraine.

In 2016, Russia exported an average 3.7 million barrels daily to European countries, compared with less than a million bpd to China, according to figures from the Energy Information Administration (EIA). In percentage figures, Europe accounted for 70 percent of Russia’s 2016 crude oil exports, while the share of China was just 18 percent. Yet this is changing fast, as this chart from the EIA shows:

(Click to enlarge)

The rise in Chinese exports has been quite steep since 2014: as of November last year, Russia shipped 1.3 million barrels of oil daily to China. All the latest signs point to further growth. However, exactly how much this would hurt European buyers is unclear.

The Urals is currently trading at a discount of about $4 to Brent crude but WTI’s discount to the international benchmark is $6 a barrel. In other words, Russia’s diverting of crude oil from Europe to China could be an opportunity for U.S. exporters as long as they can keep their transport costs low enough. Europe will probably be grateful for the diversification.

Over the long term, things are even more uncertain. Clearly, Russia has prioritized its relationship with China: In addition to the ESPO expansion, Gazprom is on track to complete the Power of Siberia gas pipeline by 2019. The 2,500-km mammoth of a pipeline will pump 1.3 trillion cu ft of gas to China annually.

The country is already the third-largest consumer of natural gas in the world, behind the U.S. and Russia, and is expected to show the strongest demand growth over the coming decades—propelling it to second place by 2040 as the economy shifts away from coal.

This soaring demand has already created shortages in parts of the country. A recent report by Eurasia Daily suggested the Power of Siberia will be essential in avoiding future gas shortages. Would that take gas away from Europe? It’s unlikely given Gazprom’s 30+-percent market share in Europe, and besides, there’s enough gas for everyone. What might happen is China overtaking Europe as Russia’s biggest gas export market at some point in the future, especially if Russia–EU relations continue to be strained.

OilPrice.com



81 Comments on "Europe Becomes Victim Of Russia’s Newest Oil Strategy"

  1. Boat on Tue, 9th Jan 2018 7:32 pm 

    In a decade China imports from Russia will be so large it will be cheaper to just take Russia over.

  2. MASTERMIND on Tue, 9th Jan 2018 7:35 pm 

    Boat

    In a decade you will be dead along with the rest of the world population! Lets not delude yourself into losing track of the big picture.

  3. Boat on Tue, 9th Jan 2018 7:54 pm 

    MM,

    Been reading shyt like that for decades. You think your the first set of doomers in the know. Lol

  4. MASTERMIND on Tue, 9th Jan 2018 7:59 pm 

    Boat

    I am not a doomer just a human…Once again you are deluding yourself…

  5. MASTERMIND on Tue, 9th Jan 2018 8:36 pm 

    Teen allegedly broke into neighbor’s barn, molested horse
    https://nypost.com/2018/01/09/teen-allegedly-broke-into-neighbors-barn-molested-horse/?utm_campaign=SocialFlow&utm_source=NYPTwitter&utm_medium=SocialFlow

    Only sick fucking white people do shit like this! sick fuckers! No wonder the world governments want to replace them with harder working immigrants.

  6. Makati1 on Wed, 10th Jan 2018 12:34 am 

    Boat, the world is going to go on after the US collapse. MM wants to think it will all turn Mad Max with wild sex and blood. Typical teenager.

    Reality is more likely to be a 3rd world America living on it’s own resources and not those of the rest of the world. An isolated country out of the world mainstream. Castle America where it is afraid to lower the drawbridge and cross the mote to the real world.

  7. Cloggie on Wed, 10th Jan 2018 12:54 am 

    That’s what you get if you listen to Russia-haters like McCain:

    https://in.reuters.com/article/southstream-bulgaria-russia/timchenko-company-blames-mccain-for-lost-bulgaria-south-stream-work-idINL6N0QA42D20140804

  8. george on Wed, 10th Jan 2018 7:08 am 

    America is getting a free lunch at the World’s cost thanks to the petro dollar.
    Despite this, America is frivolously using sanctions and forcing countries to come up with new exchange systems. It seems so counter productive I think I must be missing something.

  9. Marti on Wed, 10th Jan 2018 7:26 am 

    sdfsd

  10. Marti on Wed, 10th Jan 2018 7:30 am 

    Again, as in the refugee crisis, Europe is a victim of its own policies. For the last 10 years, Russia has been trying to build new pipelines to bring oil and gas into Europe. All sorts of roadblocks have been erected to prevent that; all at the behest of the US. It seems that the blame Russia for every malady in the West has transferred to the economy.

  11. Davy on Wed, 10th Jan 2018 7:47 am 

    “America is getting a free lunch at the World’s cost thanks to the petro dollar.”
    That is an unsubstantiated opinion many anti-Americans have. The petro dollar is not what it used to be. During the 80’s and 90’s the petro dollar was much more significant but anymore when one looks at global money flows it is not of the importance it once was. In fact oil producers recently have been divesting dollar assets. The US imports far less than it used to in relation to total imports. The US exports significant amounts of finished product which also clouds the petro dollar equation.

    Indirectly related to the petro dollar is the US reserve currency reserve status. The US dollar as a reserve currency is not what it used to be. The Chinese Yuan is increasingly important in bilateral trade and the Euro has come on strong in the basket of globally traded currency that make up foreign exchange reserves. Having a reserve currency also has its downside which anti-Americans rarely want to talk about. It has mostly benefited the wealthy Americans and multi-nationals. Main Street America has taken a beating from the offshoring of manufacturing and the wealth transfer that has occurred from this financialization in the US.

    “Despite this, America is frivolously using sanctions and forcing countries to come up with new exchange systems.”
    I agree the political shenanigans of the US must stop. This has polarized the world at a time when we have grave global problems that require global cooperation not a new cold war. The forcing of countries into new exchange systems is basically a good thing for the global world. We don’t want all the eggs in one basket

  12. onlooker on Wed, 10th Jan 2018 9:34 am 

    Again Europe is just a conglomerate of relatively small countries plus a few big ones. The European Union is at best a loose Union. And as this article stresses Russia is getting closer to China at the expense of Europe. Europe is becoming quickly irrelevant
    And rather than playing the potent countries is being played by them

  13. JuanP on Wed, 10th Jan 2018 10:18 am 

    Europe is getting what it deserves for being the USA’s minions and picking an unfair fight with Russia. I have no doubt that the USA and Europe will lose this fight. Russia simply doesn’t need us and can completely destroy us in a few minutes. The USA will be forced to back down; it is only a matter of when. I hope Russia and China continue strengthening their relationship and actively resisting the USA.

    I look forward to the day when the USA starts minding its own business. Forget the rest of the world, we really need to focus on fixing the USA. Millions of Americans are living Fourth World lives. Most people in the Third World are looking at the atrocities Americans have to put up with daily in their lives in complete disbelief. Most Americans don’t understand that life is good for most people in other places even if they have less money. Money does not equate happiness or a life worth living.

  14. onlooker on Wed, 10th Jan 2018 12:00 pm 

    Most Americans don’t understand that life is good for most people in other places even if they have less money. Money does not equate happiness or a life worth living.—
    Well said Juan. The social ills of American culture are getting worse

  15. Boat on Wed, 10th Jan 2018 12:20 pm 

    Onlooker,

    I disagree, most people are happy including most Americans. Your in a doomer self imposed bubble. Peak Oil just happened to be a popular hang out for doomers like yourself that like to blame others for the crash that may or may not happen decades away.

  16. onlooker on Wed, 10th Jan 2018 12:28 pm 

    Sadly, I may add many things are getting worse on this planet

  17. MASTERMIND on Wed, 10th Jan 2018 12:35 pm 

    Boat

    When collapse hits please dont take it all out on your sister/wife! I know how you religious people treat your woman!

  18. rockman on Wed, 10th Jan 2018 4:40 pm 

    So the logic of this article: previously China was the victim of Russia’s old oil strategy.

    Hmm…OK.

  19. Boat on Wed, 10th Jan 2018 6:53 pm 

    MM,

    I have read excerpts from your links and deemed them trash. Keep looking for somebody else to do your thinking for you.

  20. Boat on Wed, 10th Jan 2018 7:00 pm 

    MM,

    I have been doing a continuous study of energy related data for years and am happy to report there will be no crash anytime soon. Plenty of oil at a reasonable price to fuel capitalism and GDP ambitions. However because of future climate change concerns we now ask all of you to step off the planet.

  21. MASTERMIND on Wed, 10th Jan 2018 7:32 pm 

    Boat

    I am sure the studies I listed are way to sophisticated for you to understand. I apologize!

  22. Boat on Wed, 10th Jan 2018 7:55 pm 

    MM,

    Studies that have poor input lead to no impact on our lives or discussion. Your input much like shortonoil has a short shelf life. As 2018 evolves and oil remains stable concerning supply and demand your crazy rhetoric will be exposed.

  23. Boat on Wed, 10th Jan 2018 8:00 pm 

    MM.

    There was no 167,000 gain in US production last month. More trash from a cut and paster rather than numbers from someone who actually follows energy. PS a new report out Monday. Try to read it.

  24. MASTERMIND on Wed, 10th Jan 2018 8:20 pm 

    Boat

    Poor imputs? Studies by NASA, Royal Society, MIT, etc…It doesn’t get any more professional and scholarly…Every study was authored by an expert with a PhD..But I know boat what do those doctors know anyways!

  25. MASTERMIND on Wed, 10th Jan 2018 8:23 pm 

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently.
    https://imgur.com/a/6dEDt
    http://www.sciencedirect.com/science/article/pii/S030142151300342X
    http://www.sciencedirect.com/science/article/pii/S0016236114010254
    http://www.geo.cornell.edu/eas/energy/the_challenges/peak_oil.html

    This shock, will be electric and abrupt. Stress, fear, depression, despairs, and nightmares will be the order of the day — as people come to face the not-so-palatable facets of ‘Post Peak Oil’.

    – Dr Ali Samsam Bakhtiari

  26. MASTERMIND on Wed, 10th Jan 2018 8:30 pm 

    Boat

    Eat my ass! You are racist scum! Its not the immigrants fault you are poor and America is collapsing.

  27. MASTERMIND on Wed, 10th Jan 2018 8:32 pm 

    Boat

    You don’t think a study concluding a collapse of your own society will have an impact on your life? LOL When the homeboys come knocking and are running a train on your daughter in your living room! You might think differently! LOL

  28. Makati1 on Wed, 10th Jan 2018 8:41 pm 

    MM, can you control your immaturity? Rape and blood is a teen vision of the future. Get a grip.

  29. MASTERMIND on Wed, 10th Jan 2018 8:50 pm 

    Madkat

    You dont think there will be any rape when there is total anarchy in America? Once again you are not capable of using your elderly imagination.

  30. MASTERMIND on Wed, 10th Jan 2018 8:52 pm 

    Madkat

    Your grand daughters are going to be turned into the goons personal fuck toys! They will be banging them all day and night in both holes! And if they won’t swallow the homeboys will put it on a spoon for them and make airplane noises!

  31. Makati1 on Wed, 10th Jan 2018 9:54 pm 

    MM, Your GF will switch sides so fast when the SHTF, and you cannot take care of her (food,shelter,protection), that your head will spin. That alpha male with the bling and a warehouse full of stolen goodies will outweigh your education and ‘other charms’. Think about it.

    You live the decadent, immoral, drugged up hell hole called America, but most do not. Rape and murder is a common event even in good times. Sure it will happen when the SHTF, but not in the ways you imagine. Murders will happen IF you resist giving up whatever you have, but there is the option of sharing and making yourself of use to the oppressors. All you need is a skill they need or value. Survival skills will always have value. So is a community where you all work together for the common good. Think about it.

    Give up the sex and gore fantasy bullshit and join us in the real world.

  32. rockman on Thu, 11th Jan 2018 4:12 pm 

    MM – “Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years.” Did you mean oil prices or production rates? It’s physically impossible for reserve numbers (regardless of whose you use) to change that quickly. Even when oil prices dropped so hard and the amount of economically recoverable reserve decreased so dramatically it still wasn’t close to the magnitude you describe.

    Even the most pessimistic estimate of the depletion of our proven reserves is just several % per year. So even 3 years of depletion of that rate couldn’t be called “catastrophic”

  33. MASTERMIND on Thu, 11th Jan 2018 4:47 pm 

    Rockman

    This is you soon!
    https://imgur.com/a/lhbG9#hISlIXn

  34. MASTERMIND on Thu, 11th Jan 2018 4:50 pm 

    Walmart is abruptly closing 63 Sam’s Club stores and laying off thousands of workers

    http://www.businessinsider.com/walmart-suddenly-closes-sams-club-stores-2018-1

  35. MASTERMIND on Thu, 11th Jan 2018 4:51 pm 

    You know when Walmart starts to collapse it’s gonna be game over soon! This is deferentially a canary in a coal mine.

  36. Makati1 on Thu, 11th Jan 2018 5:13 pm 

    Walmart: “Today, Walmart operates over 11,700 retail units under 59 banners in 28 countries. We employ approximately 2.3 million associates around the world –1.5 million in the U.S. alone.”

    https://corporate.walmart.com/our-story/our-locations

    Closing a few stores is common when you are that large. When they close thousands, then it is a bad sign. That day us coming.

    BTW: There are no Walmarts here. They cannot compete with Chinese stores in the Ps. lol

  37. MASTERMIND on Thu, 11th Jan 2018 5:35 pm 

    Madkat

    Do you realize how large a sams club store is? not all stores are equal. Its like three stores in one. So closing 60 of them is like closing hundreds. This is a very alarming sign..

  38. Makati1 on Thu, 11th Jan 2018 6:11 pm 

    MM, I’ve been in several Sam’s Clubs. They have similar sized stores here in the Ps called S&M. It is just business. Nothing to get alarmed about until they close a few thousand. They are no bigger than the Walmart in my hometown in PA.

    11,000 is no more than a rounding error in their employee numbers. Ditto for a few dozen stores. Less profitable stores are closed all the time. New ones open somewhere else. That is just business as usual.

  39. Boat on Thu, 11th Jan 2018 6:50 pm 

    Sam’s work best for large families buying bulk. The size of the average family has been shrinking for decades. See if you can guess why Sam’s business model is troubled.

  40. MASTERMIND on Thu, 11th Jan 2018 6:59 pm 

    Boat our population is growing at 2 percent a year which means we will double in the next 35-40 years. Once again you have no knowledge into what you are arguing and just like peak oil.

  41. MASTERMIND on Thu, 11th Jan 2018 7:05 pm 

    Give me a fucking break madkat. This is America and this is Wal Mart you are speaking about.

  42. Boat on Thu, 11th Jan 2018 7:37 pm 

    The US population would be shrinking if it were not for illegals and immigration. Google family demographics in the US if you want to learn something. The US census and pew foundation will set you straight.

  43. Makati1 on Thu, 11th Jan 2018 7:40 pm 

    What do you think I am talking about? (WALMART – no space) It is not just in the US. (28 countries) And it is going to close any store that is not profitable. That is common in business, but then, you have no experience in business, just college, or so you claim.

  44. Boat on Thu, 11th Jan 2018 7:43 pm 

    MM,

    Your but one of dozens that come in here yapping shyt without doing the research first. Now where was that link of 167,000 bpd growth in production last month you claimed?

  45. MASTERMIND on Thu, 11th Jan 2018 7:47 pm 

    When Sears, JC Penney’s, and Macy’s goes under in the next recession, it’s all over for the retail sector

  46. GregT on Thu, 11th Jan 2018 8:13 pm 

    “Your but one of dozens that come in here yapping shyt without doing the research first.”

    For starters, there are not ‘dozens’ of people who post here, and that would be ‘you’re’, not ‘your’.

    Come on Boat, after all of these years, please, at least try to put a little bit of effort into grasping grade school English.

  47. Makati1 on Thu, 11th Jan 2018 8:14 pm 

    MM, They are small potatoes compared to Walmart. But, yes, retail is going to change drastically. Adjust.

  48. GregT on Thu, 11th Jan 2018 8:30 pm 

    Makati1,

    You should change your user name to Mad Kat. It makes you sound much stronger, wiser, and cooler, than Makati1 does.

    The Mad Kat™. You must admit, It does have a certain ring to it. Much more so than ‘The Donald™’.

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